Symantec 2000 Annual Report Download

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Symantec {2000 }

Table of contents

  • Page 1
    Symantec { 2000 }

  • Page 2
    100.00 SECURITY 00.00

  • Page 3
    ...e-mail and Internet scanning and filtering solutions to protect customers by blocking unauthorized or inappropriate content. The technologies and products we acquired from L-3 Network Security enable customers to assess, manage and monitor network vulnerability levels and assist in security planning...

  • Page 4
    ... improvement of our product offerings and innovative solutions to customer problems. By introducing Norton Internet Securityâ„¢, we created an entirely new category of software for personal Internet security. This suite combines a personal firewall, content filtering and virus protection and has...

  • Page 5
    ... with Yahoo!®, where we protect 38 million users from malicious attacks, and with Brightmail™, Inc. and Tele Danmark™ Internet Service help our products permeate this service provider market. Earlier this year, we created a group within Symantec with the sole purpose of developing carrier-class...

  • Page 6
    ... online activities will be free from viruses, e-mails with malicious intent, loss of personal financial information or inappropriate Internet content flooding their computers. And so, increasingly, they look to Symantec. Expertise. Because of our unequalled expertise in security protection, Symantec...

  • Page 7
    Discovered Melissa Chernobyl I Love You Very Funny 3.26.99 4.26.99 5.4.00 5.4.00 Time to Cure 1 hour automatic fix 2 hours less than 1 hour

  • Page 8
    .... Symantec's Norton Internet Security provides a complete suite of Internet security solutions, including a personal firewall to detect and stop hackers. Corporations also use this { Symantec gives individuals and corporations assurance that online activities will be free from viruses, e-mails with...

  • Page 9
    ...systems used as an open door for malicious attacks on the corporate network. Our e-mail scanning software goes beyond virus prevention. These solutions protect confidential information from escaping in e-mails and prevent hate, sexual harassment and content with inappropriate language from traveling...

  • Page 10
    ... against viruses and intrusions. The global response teams detect new viruses, worms and malicious code, then assess, find remedies and distribute protective code to customers - in many cases, before their customers' work day even begins. Working with our researchers worldwide, we use time zones to...

  • Page 11
    ..., Inc. } "With Symantec, we are providing the industry's first integrated anti-virus and anti-spam solution for ISPs and ASPs. This comprehensive solution incorporating filtering products and services greatly enhances the usability of e-mail, enabling ISPs and ASPs to extend the Brightmail platform...

  • Page 12
    ... research and develop next generation virus protection, risk management, intrusion protection and content filtering solutions to stay well ahead of potential new threats. For example, although there are currently no known viruses aimed at hand-held access devices, Symantec developed the world...

  • Page 13
    ... Value-Added Resellers (VARs). Our goal is to build three sets of services: carrier class solutions, web-hosted applications and managed services. These solutions will include virus protection, scanning and filtering tools and intrusion prevention. This is an enormous opportunity for Symantec, and...

  • Page 14
    RESULTS { Financial Review

  • Page 15
    ... future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others things, those risk factors set forth in our previously filed Form 10K for the year ended March 31, 2000. We identify forward-looking statements...

  • Page 16
    ... and network security solutions to individuals and enterprises. We are a leading provider of virus protection, risk management, Internet content and e-mail filtering, remote management and mobile code detection technologies to enterprise and individual customers. Founded in 1982, we have offices in...

  • Page 17
    ... payment of cash dividends on our common stock. Delrina exchangeable stock has been traded on the Toronto Stock Exchange under the symbol "DE" since the acquisition of Delrina by Symantec on November 22, 1995. The high and low closing sales prices set forth below are in Canadian dollars as reported...

  • Page 18
    ... for work productivity, rather than leisure activities. Elements of content security include virus and mobile code protection and e-mail and Internet content scanning and filtering. Virus and Mobile Code Protection Our anti-virus solutions protect computers and networks at multiple entry points from...

  • Page 19
    ... in the antivirus and Internet content filtering technologies. In addition, we provide complete vulnerability and security assessments of enterprise customer information systems. Sales and Marketing, International Sales and Customer Support We market our products worldwide utilizing a multi-channel...

  • Page 20
    ...-user rebates are accrued when revenue is recorded. Our return policy allows distributors, subject to various limitations, to return purchased products in exchange for new products or for credit toward future purchases. End-users may return products through dealers and distributors for a full refund...

  • Page 21
    ... e-mail and Internet content scanning and filtering products. We compete against ISS Group, AXENT Technologies and Network Associates in the network security marketplace. Our e-Support products, pcAnywhere and Norton Ghost Enterprise Edition, compete with Traveling Software, Stac Software, Netopia...

  • Page 22
    ...-off the acquired in-process research and development. We are amortizing the value of the workforce in place and acquired product rights over four years. In May 1998, we entered into an agreement with IBM to acquire its immune system technology and related anti-virus patents. The acquisition was...

  • Page 23
    ... 2000 as compared to fiscal 1999. This increase was primarily due to outbreaks of significant viruses, new releases of both new and existing products and our customers preparing for the Year 2000 rollover. These factors contributed to growth in sales of Norton Enterprise Solutions and e-Support

  • Page 24
    ...amortization related to acquired product rights associated with our acquisition of Intel's anti-virus business and the acquisitions of Binary's operations and Quarterdeck. The amortization of our fiscal 2000 and 1999 acquisitions will occur over the next three to five years. Research and Development...

  • Page 25
    ... in-process research and development associated with the fiscal 2000 acquisitions to create Internet security intrusion detection, vulnerability assessment, new antivirus products and enhanced management and administrative capabilities to be integrated into our products over the next year. There...

  • Page 26
    ...-process technology acquired in the URLabs acquisition primarily consisted of research and development related to the next generation of URLabs' two main products, I-Gear 3.5 and Mail Gear 1.2. The I-Gear and Mail Gear product lines are designed for content management use in URL filtering and e-mail...

  • Page 27
    ... copyright action assumed by us as a result of our acquisition of Delrina Corporation. IBM The in-process technology acquired in the IBM purchase primarily consisted of the IBM immune system technology and related anti-virus patents. We have integrated this technology into our anti-virus products...

  • Page 28
    ... of expense, from sale of technologies and product lines 41,155 45,421 Transition Fees In accordance with individual transition agreements, WebGain and Interact will pay us a fee for invoicing, collecting receivables, shipping and other operational and support activities, until such time as they...

  • Page 29
    ... cash provided from operations, net proceeds from the exercise of stock options under our stock option plans, sales of common stock through our employee stock purchase plan and the receipt of restricted stock and cash from our divestitures of the ACT! and Visual Café product lines. Quarterdeck had...

  • Page 30
    ... 31, 2000, these securities consisted of approximately 600,000 shares of Interact Commerce Corporation, a publicly traded company (Nasdaq symbol "IACT"), with a market value of approximately $16.9 million. We believe that it is reasonably possible that the prices of these securities could experience...

  • Page 31
    ...operations. We have established a foreign currency hedging program, utilizing foreign currency forward exchange contracts, or forward contracts, of one fiscal month...established policies and procedures governing the use of financial instruments to manage our exposure to such risks. We use sensitivity ...

  • Page 32
    ... and short-term investments Trade accounts receivable Inventories Deferred income taxes Other Total current assets Long-term investments Restricted investments Equipment and leasehold improvements Deferred income taxes Purchased product rights and capitalized software Goodwill Other $ 431 ,550...

  • Page 33
    ...STATEMENTS OF INCOME Year Ended March 31, (In thousands, except net income per share) 2000 $ 745,725 121,073 624,652 1999 $ 592,628 96,558 496,070 1998 $ 532 ,940 87 , 431 445 ,509 Net revenues Cost of revenues Gross margin Operating expenses: Research and development Sales and marketing General...

  • Page 34
    ... comprehensive income Issued common stock: 4,338 shares under stock plans 100 shares of restricted stock Amortization of unearned compensation Agreement with former CEO Repurchased 1,000 shares of common stock Income tax benefit related to stock options Balances, March 31, 2000 $ 554 - - - $ 291...

  • Page 35
    ... stock options Net cash provided by operating activities INVESTING ACTIVITIES: Capital expenditures Purchased intangibles Proceeds from divestiture of Visual Café product line Purchase of L-3 Network Security's operations Purchase of URLabs Payment of debt related to purchase of IBM's anti-virus...

  • Page 36
    ... Policies Business Symantec, a world leader in Internet security technology, provides a broad range of content and network security solutions to individuals and enterprises. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Symantec Corporation...

  • Page 37
    ... industry or customer requirements, or the emergence of competitive products with new capabilities or technologies, could adversely affect operating results. In addition, a significant portion of our revenues and net income is derived from international sales and independent agents and distributors...

  • Page 38
    ... issues including: (a) the definition of an employee for purposes of applying Opinion No. 25, (b) the criteria for determining whether a plan qualifies as a noncompensatory plan, (c) the accounting consequence of various modifications to the terms of a previously fixed stock option or award and...

  • Page 39
    ...post-contract support (generally telephone support) that is accrued at the time of product sale. Advertising expenditures are charged to operations as incurred. NOTE 3. ACQUISITIONS AND DIVESTITURES Acquisition of 20/20 Software On March 31, 2000, we purchased 100% of the outstanding common stock of...

  • Page 40
    ...40 }0 1998, we entered into an agreement whereby we purchased Intel Corporation's anti-virus business for approximately $16.5 million. We also licensed Intel's systems management technology. Intel promoted Norton AntiVirus through its worldwide reseller channels. The transaction was accounted for...

  • Page 41
    ...into an exclusive Software License Agreement ("License") and licensed, on an exclusive basis, to Interact Commerce Corporation, previously SalesLogix ("Interact"), substantially all of the ACT! product line technology for a period of four years. In addition, the inventory and fixed assets related to...

  • Page 42
    ..., payable over four years in quarterly installments through the June 2000 quarter. During February 1998, the purchase agreement was amended to accelerate certain quarterly payments during the remaining payment term in exchange for a reduction in the total sale price to approximately $93 million...

  • Page 43
    ... ,994 Money market funds Corporate securities Bank securities and deposits Taxable auction rate securities Our available-for-sale restricted investments relate to certain collateral requirements for lease agreements associated with our corporate facilities in Cupertino, California. Fair values of...

  • Page 44
    ... City Center Two ("CC2") in Cupertino, California and committed to sell WHQ. In fiscal 2000, we completed the appropriate leasehold improvements to CC2 and vacated WHQ. As we have moved into CC2, we were relieved of the lease liability associated with WHQ. Lease payments are based on the three-month...

  • Page 45
    ... Net operating loss carryforwards of acquired companies Inventory valuation accounts Other reserves and accruals not currently tax deductible Accrued compensation and benefits Deferred revenue Sales incentive programs Reserve for returns and allowances Acquired in-process research and development...

  • Page 46
    ...million for each of the years ended March 31, 2000, 1999 and 1998. Employee Stock Purchase Plans In October 1989, we established the 1989 Employee Stock Purchase Plan ("89 Plan") and reserved a total of approximately 3.4 million shares of common stock for issuance under this plan. Subject to certain...

  • Page 47
    ... options outstanding at March 31, 2000: Outstanding Options Number of Shares Range of Exercise Prices $ 4.15 - $ 11.00 (in thousands) Exercisable Options Number of Shares (in thousands) Weighted Average Contractual Life (in years) Weighted Average Exercise Price $ 10.54 Weighted Average Exercise...

  • Page 48
    ... assumptions: Employee Stock Options 2000 1999 5.27 0.66 5.1% 1998 4.84 0.61 5.4% The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require...

  • Page 49
    ..., related benefits and outplacement services for two members of senior management due to the realignment of our business units and their resulting departures during the March 2000 quarter. During the December 1999 quarter, we reduced our Internet Tools business unit's workforce and reduced our Sales...

  • Page 50
    ... the identified employees had their severance packages communicated to them. Additionally, we accrued estimated costs associated with outplacement services to be provided to terminating employees, as these costs have no future economic benefit to us. The remaining accrual at March 31, 2000 was for...

  • Page 51
    ... new rules for the reporting and disclosure of other comprehensive income (loss) and its components; however, it has no impact on our net income or stockholders' equity. The components of other comprehensive income (loss), net of tax, are as follows: Year Ended March 31, (In thousands) 2000...

  • Page 52
    ..., selling, transferring or directly or indirectly copying into any new Network Associates product or new version of an existing product that has our code, (ii) requiring Network Associates to notify distributors who were still selling versions of PC Medic 97 that had our code to tell customers that...

  • Page 53
    ...purchasers of Procomm Plus version 4.0 for Windows product ("Product"). The complaint purported to assert claims for breach of warranty and violation of New York's Consumer Protection From Deceptive Acts and Practices Act arising from the Product's inability to process dates containing the year 2000...

  • Page 54
    ...The Professional Services segment is focused on providing technical support to our customers and assisting organizations to understand and implement Internet security infrastructure and policy management. The Other segment is comprised of sunset products, products nearing the end of their life cycle...

  • Page 55
    ... Information Consumer and Small Business (In thousands) Enterprise Solutions e-Support Professional Services Other Total Company Fiscal 2000 Revenue from external customers Operating income (loss) Depreciation & amortization expense Fiscal 1999 Revenue from external customers Operating income...

  • Page 56
    ... sheets of Symantec Corporation as of March 31, 2000 and 1999 and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended March 31, 2000. These financial statements are the responsibility of the Company's management. Our...

  • Page 57
    Corporate Directory and Shareholder Information

  • Page 58
    ...and Services Bill Owens Co-Chief Executive Officer and Vice Chairman, Teledesic LLC Allyson Seelinger Vice President, North American Consumer Sales, Marketing and Services Gary Warren Daniel H. Schulman President and Chief Operating Officer, Priceline.com Senior Vice President, Market Development...

  • Page 59
    ... Box 1666 Boston, MA 02105-1666 (800) 733-5001 Ernst & Young LLP 303 Almaden Blvd. San Jose, CA 95110 Annual Meeting The annual meeting of stockholders will be held September 18, 2000 at Symantec Corporate Worldwide Headquarters, Cupertino, California. Common Stock The Company's stock is traded on...